an unsecured debt instrument with certain equity-like characteristics. The Mezzanine component of a Capital Structure is Subordinate in the right of payment to Senior Debt and carries a Coupon similar to High Yield Bonds. Mezzanine debt is often issued at the Holdco level. Mezzanine often has equity features, frequently referred to as Equity Kickers, which may take the form of Warrants that permit the holder to purchase equity at a preset price, or conversion features upon certain events (such as a Change of Control). The combination of the debt Coupon and the Equity Kickers gives Mezz investors a higher return than High Yield Bonds.
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